Our homeowner’s insurance lawyers understand that the language in a policy often can be difficult to interpret especially in the context of other provisions of the policy. Ambiguity in a policy generally will be construed to provide coverage when the language is susceptible to conflicting interpretations both authorizing and negating coverage. However, this rule must be understood in terms of the distinction between latent and patent ambiguity. Patent ambiguity refers to provisions or terms that are conflicting or unclear in the policy itself. Because the insurance company drafts the policy, such ambiguities will be construed against the carrier. Latent ambiguities involve situations where the policy is clear when considered on the policy’s face, but unanticipated facts emerge that render the policy unclear under the specific circumstances.
Experienced Florida Insurance Attorneys Can Exploit Policy Ambiguities
The Florida Second District Court of Appeals in Price v. Castle Key Indemnity Company considered this distinction in reversing summary judgment against an insured. The court considered whether a loss caused by 195,000 gallons of water over a prolonged period would be considered “seepage.” The parties to a homeowner’s policy agreed that the massive water loss was caused by a leaking pipe in an upstairs bathroom during an extended absence of the policyholder. The policy covered “sudden and accidental physical loss to property” subject to the following exclusion:
“[s]eepage, meaning continuous or repeated seepage or leakage over a period of weeks, months, or years, of water, steam, or fuel … from, within[,] or around any plumbing fixtures, including but not limited to shower stalls, shower baths, tub installations, sinks[,] or other fixtures designed for the use of water or steam.”
The insured contended that the seepage exception was inapplicable because of the lengthy duration of the water loss and the massive volume of water. The insured calculated that about 6,000 gallons must have been lost each day based on the duration and volume of water accumulation. Given the volume of water and rate it escaped, the policyholder contended that ambiguity existed regarding whether the damage was caused by “seepage,” which was expressly excluded under the policy. The insured also argued that “sudden” also was ambiguous because it can be defined as referring to “unexpected” or “unanticipated.” The trial court determined the loss was not covered because it fell within the seepage exception.
On appeal, the court first expounded on the distinction between latent and patent ambiguities in an insurance policy. The court explained that patent ambiguities are apparent based on the face of the policy while latent ambiguities emerge based on extrinsic evidence that creates a need to decide between multiple meanings. The court found that the policy was not ambiguous on its face. However, the court reasoned that the terms sudden and seepage were not clear given the amount of water that leaked over a prolonged period. The court reversed the grant of summary judgment because there was a genuine factual question regarding whether the water damage was the result of a burst of water flowing at a constant rate or a leak that escalated over time.
This case demonstrates the way subtle distinctions in interpreting policy language can have a dramatic impact on coverage decisions. While policy language referred to by an insurer in a denial letter might appear clear and unambiguous, an experienced Miami insurance claims lawyer might be able to find other language or suggest an alternative interpretation that entitles you to coverage.
Our Miami homeowner’s insurance claims lawyers at Greenberg, Stone & Urbano offer the assistance you need to obtain the results you desire. With over 130 collective years of experience representing policyholders across South Florida, our firm provides legal representation of unmatched excellence. Contact our firm as soon as possible to start on the road to protecting your legal rights. Our firm received an AV rating from Martindale-Hubbell and was ranked as a top firm in South Florida by the Miami Herald. Put our Florida insurance attorneys to work on your case. Call us at (888) 499-9700 or (305) 595-2400 or you can visit our website to schedule your initial consultation.